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(Reason Magazine)   "People who decry the Wal-Mart-ification of America need to realize that regulation often does more harm to local businesses than predatory pricing, loss-leader business models, or some other imagined corporate evil."   (reason.com ) divider line 278
    More: Obvious  
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6688 clicks; posted to Main » on 05 Dec 2007 at 6:37 PM (8 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2007-12-05 09:02:19 PM  
You know what the funniest, most awesome thing I saw all week? It was the Chehalis, WA, Wal-Mart, drowning in flood-waters all the way up to the sign. Now there's progress, I thought.
 
2007-12-05 09:02:22 PM  
Walmart == Cheap Chinese Crapola

Walmart == Cheap Chinese lead laced Crapola
 
2007-12-05 09:06:57 PM  
ScubaDude1960: Why don't all of you statists just move to North Korea?

We would, but the move could endanger our government-cheese collection efforts.

In the spirit of meaningful dialogue, may I suggest you move to Somalia? Lots of guns, no statists, in fact, no law of any kind.
 
2007-12-05 09:13:25 PM  
I don't know much about wal-mart, (we don't have them here in Australia), but I looked them up on Wikipedia out of curiousity. This is a little off topic, but the wiki-page said the following;

"and analysts recently estimated that more than one-fifth of them [the walmart customers] lack a bank account, twice the national rate"

How the fark do you live without a bank account? Even if you're on welfare you need a bank account (in Australia).
 
2007-12-05 09:17:41 PM  
cutters1981: How the fark do you live without a bank account? Even if you're on welfare you need a bank account (in Australia).

Here in America, we have "check cashing places"

For a fee, these guys will cash your paycheck for you, so you can go to Wal-Mart and buy things you don't really need. The guys who run these check cashing places will then deposit your check in their account and buy things at stores that don't suck.
 
2007-12-05 09:20:00 PM  
Dont like it, dont shop there. If enough people dont shop there, things will change. Problem is the bottom line doesn't just matter to corporate America, it matters to individual Americans as well. Which is why people will put up with WalMart's crap to save a few bucks.
 
2007-12-05 09:23:07 PM  
The_Gallant_Gallstone: cutters1981: How the fark do you live without a bank account? Even if you're on welfare you need a bank account (in Australia).

Here in America, we have "check cashing places"

For a fee, these guys will cash your paycheck for you, so you can go to Wal-Mart and buy things you don't really need. The guys who run these check cashing places will then deposit your check in their account and buy things at stores that don't suck.


Thanks for clearing that up! Sounds like a crummy way to live though. Why don't people just open up a bank account and have their salary/welfare deposited into that?
 
2007-12-05 09:23:35 PM  
I just don't get Wal-Mart haters. Don't shop there if you are so horrified by their business practices.

An employer has no obligation to be liked by employees or provide a so-called "livable wage". If conditions at Wal-Mart are so terrible, the employees can get a different job. If employees don't have marketable skills, they are likely overpaid as it is and they should strive to do their job better to receive promotions or learn a marketable skill. Anyone who works in a low-skill job (cashier or stocker) should understand that these types of jobs do not pay enough to start a family, buy a home (at least not in Orange County), purchase a new car, or the latest plasma TV. Low-skill jobs are not appropriate for people who want, or have, such things. Low-skill jobs are appropriate for students, retirees, and people who want to work part time.

Wal-Mart has never put a Mom & Pop shop out of business. Mom & Pop's Customers did. Mom & Pop do not have the right to remain in business if their Customers choose to shop elsewhere. This means that Mom & Pop need to do it better than their competition. If Mom & Pop can't beat the competition on price, beat them with service. I manage three small retail stores and this is the only way we survive against Home Depot, Lowe's, True Value, and Wal-Mart. The reason Mom & Pop go out of business is because they are too stubborn to change the way they do business when a legitimate competitor (see stores listed above) comes to town.
 
2007-12-05 09:23:52 PM  
itsfullofstars Did you offer a plan and then immediately argue that it's futile? "Don't like it, don't shop there" won't work because not enough people are angry about Wal-Mart.

"Don't shop there" is not a starting point for a movement against Wal-Mart. It's an avenue that can be pursued once enough people are moved to action.
 
2007-12-05 09:24:28 PM  
pwhp_67: mmm... pancake: Wal-Mart is not obligated legally or morally to provide health care for any of its employees.


That's the current spin that we hear a lot these days. Unfortunately for WalMart, many of us have good memories and we remember the timeline.

WalMart would typically tell a city council that it planned on opening a massive store and would hire 300 people and wouldn't that be just dreamy for the local economy? So good, in fact, that you could let us skip on the property tax for 3 years, approve the special zoning that we want, and throw in some other handouts as well?

Then, once they've looted the city, they (WalMart) hires 300 people only 75% of them are part-time and therefore not eligible for health care (So they get on the state assistance program.) and many in the 25% of full-time employees make so little that they can't afford the health package either and so they get on the local tax-payer supported plan.

So you're right - they are not obligated to provide health coverage or any other benefit. So what? The fact is they bullshiatted the local government, farked up the local economy, and so now many cities are telling them to provide for the employees or get the fark out.

It's called "payback" and it can be a biatch...


This post is a thing of beauty
 
2007-12-05 09:28:05 PM  
Yes, regulations are "barriers to entry" which limit competition and restrict that competition to larger well established companies. As such, yes, big business loves regulation.
 
2007-12-05 09:29:51 PM  
EatHam: czarangelus: Let's do it this way - don't do business with countries who don't have labor and human rights standards on par with those of America.

So you'd like to doom any country that isn't in Europe or North America to keep their same shiatty standards, rather than trade with them and elevate their standard of living? That is kind of cruel, if you ask me.


It would raise living standards in countries where the government does not confiscate profits and artificially limit wages to keep demand for cheap labor high.
 
2007-12-05 09:30:05 PM  
MrsHashBrown: I just don't get Wal-Mart haters. Don't shop there if you are so horrified by their business practices.

Individual boycotts are commendable, but pointless.

All power in this world is collective; even if it is just at the local government level (as pwhp_67 is discussing). There are many excellent reasons to hate Wal-Mart, but I'd rather do something constructive to make them change instead.

/would love to see some unionization at Wal-Mart
//would take about a 1,000 years though
 
2007-12-05 09:30:15 PM  
T1nman33: This article and the resulting discussion is why I feel every American ought to take a course in basic financial business principles, including basic accounting, basic corporate finance, and basic microeconomics.

I'm saying this not to be chiding, but because I didn't understand any of this stuff once upon a time either and was taken to knee-jerk "Wal Mart is bad and they took r jarbs!" statements too. But most people don't get economics, and consequently, they make stupid decisions, which is evident here.


I hate to be a "this" guy, but...

THIS!!!!
 
2007-12-05 09:31:12 PM  
I buy my hardware in a family-owned hardware store in my town that has been owned by the same family and been in the same location since 1877. Still has wooden floors, which I like a lot. They hooked up with Tru-Value so the prices are competitive with the very nearby Home Depot and their employees know how to swing a hammer and paint a house and generally answer hard questions about home repair. Here's a small business surrounded by box stores that knows how to survive and thrive. Maybe the mom & pops Wal-Mart killed deserved to die?
 
2007-12-05 09:33:55 PM  
MrsHashBrown: The reason Mom & Pop go out of business is because they are too stubborn to change the way they do business when a legitimate competitor (see stores listed above) comes to town.

I think WalMart selling products below cost in order to drive other businesses out has something to do with it. It's happened with pharmacies in Arkansas. Luckily, pharmacists are resourceful enough to put a stop to that pretty quick.

But you believe what you want. Stay comfortable.
 
2007-12-05 09:35:22 PM  
longtimereaderfirsttimeposter: Yes, regulations are "barriers to entry" which limit competition and restrict that competition to larger well established companies. As such, yes, big business loves regulation.

Some regulation. Some.

Change what is bad and keep what is good.
 
2007-12-05 09:36:49 PM  
ScubaDude1960: I hate to be a "this" guy, but...

Ah... "economics". That word gets thrown about like it is some sort of sublime and esoteric mystery. If someone admonishes Wal-Mart, it is because he doesn't understand "economics". There's no explanation; it's like magic or charisma, you either have it or you don't.

Economics doesn't operate that way. Wal-Mart doesn't operate on the same plane of existence as those firms you studied in micro and macro economics in college. Those firms were governed by a theoretical condition known as "perfect competition". Wal-Mart is in a near unique position to leverage epic pressure on suppliers, vendors and its work force. When some government agency half-heartedly sends Wal-Mart a bill for some safety violation, Wal-Mart simply pays it.

Simply put, our current system is not adequately prepared to deal with entities like Wal-Mart. Reform begins at the SEC of all places.
 
2007-12-05 09:37:09 PM  
img209.imageshack.us

Hats off to you sir.

It's good to see a Troll with some subtlety.
 
2007-12-05 09:38:25 PM  
The problem with Wal-Mart is that is practically IS regulation, but by a corporation. Wal-Mart dictates the pricing strategies of anyone who deals with them...because they can.
 
2007-12-05 09:40:02 PM  
I never understood the mystique of Walmart. It's only a good store if there is nothing else around. And this was true when they did their first big expansions--they mostly grew in rural areas where there were no good stores. The "savings" aren't even very good--a few things are loss leaders, and many things are not even competitively priced. Things seem terribly messy, and not high-quality. I LMAO when fake populists like Ben Stein and George Will sing their praises, because I bet either one of them would be found in a tranny bordello before actually shopping at Wallyworld.
 
2007-12-05 09:40:07 PM  
reason magazine = we wish Ayn Rand were alive and had a rod so we could smoke it
 
2007-12-05 09:47:23 PM  
No Such Agency: _Dan:
The only people dumber than those who want to over-regulate business are the ones who oppose all regulation. You do not have to be a genius to understand that there is some comfortable balance between allowing "free enterprise" and allowing a company to abuse its workers, create monopolies, and pay off elected officials raise a mercenary army and blow up its competitors' headquarters.

That's what no regulation gets you. Regulation = laws, it's that simple. Why should people's behaviour be governed by laws, but corporations' should not? If it's an "unfair restriction" to tell a company what the least it can pay is, how it it a fair restriction to tell them they can't murder and steal for profit?



Look up the words "voluntary" and "coerced" in the dictionary and you will have your answer.
 
2007-12-05 09:54:53 PM  
kindpastor: No Such Agency: _Dan:
The only people dumber than those who want to over-regulate business are the ones who oppose all regulation. You do not have to be a genius to understand that there is some comfortable balance between allowing "free enterprise" and allowing a company to abuse its workers, create monopolies, and pay off elected officials raise a mercenary army and blow up its competitors' headquarters.

That's what no regulation gets you. Regulation = laws, it's that simple. Why should people's behaviour be governed by laws, but corporations' should not? If it's an "unfair restriction" to tell a company what the least it can pay is, how it it a fair restriction to tell them they can't murder and steal for profit?


Look up the words "voluntary" and "coerced" in the dictionary and you will have your answer.


Hmmm. Want to discuss that with Walmart employees who "volunteered" to work off the clock and miss meals?
http://query.nytimes.com/gst/fullpage.html?res=9C0DE5DE1230F930A25752C0A9629C8B6 3
 
2007-12-05 09:57:58 PM  
kindpastor if you're going to defend Wal-Mart, I recommed you wait until the check clears before you start. I understand they can be pretty shady with their employees.
 
2007-12-05 09:58:31 PM  
Market regulation sucks. Yeah, there's the economic stratification caused by low wages and outsourced jobs, and you do get a certain amount of preventable crime from creating a de facto permanent underclass. And sure, the customers kind of have an issue when they get minimal service for maximum money because the leading companies in a field have conspired to form an oligopoly. And I guess it's a bit of an issue when there's not enough tax base to support working public schools but no one can afford private schools, and I don't particularly like having to pay out of my pocket to have someone plow my street after a snowstorm, and I can't really afford the tolls on the private turnpike that takes me to my union-free job, and I'm losing hundreds of dollars a week in overtime pay because nobody will nail my boss for monkeying with the time sheet, and I don't have health insurance because "market competitive benefits" apparently means "not without a gun to our heads" in the personnel department, but dammit, it's a small price to pay for the free market!

This message brought to you by the Committee for Making Libertarians Think It Through.
 
2007-12-05 10:03:05 PM  
 
2007-12-05 10:04:03 PM  
hillbillypharmacist: I think WalMart selling products below cost in order to drive other businesses out has something to do with it. It's happened with pharmacies in Arkansas. Luckily, pharmacists are resourceful enough to put a stop to that pretty quick.

Below whose cost? Theirs or the other businesses in town? Most retailers won't stay in business for long if they sell merchandise for less than they purchased it (not including loss leaders). It's also considered predatory pricing and I believe there are regulations against it. Each of the stores in my post sell their locks far cheaper than I can buy mine from the distributor. So my Customers pay more when they buy from me. But they also get superior service and help from someone who knows the product. I do it better than my competitors, which is the only reason I should stay in business. If pharmacists in Arkansas do it better than Wal-Mart, good for them too. I don't think we're in disagreement.
 
2007-12-05 10:06:08 PM  
Another regulatory issue that does harm is the way we deal with property and sales tax: these revenues are collected and redistributed by the state while sales taxes stay local. There is an automatic disincentive then to develop industry or housing.

This is why localities are willing to give these big box guys the sweetheart deals that they do: they want the sales tax revenues.

It doesn't help that CA has Prop 13 which creates inequities in property taxes to begin with. Yet, even Arnold the Governator lacks the huevos to dismatle it.

Read more here (new window)
 
2007-12-05 10:19:08 PM  
hillbillypharmacist: MrsHashBrown: The reason Mom & Pop go out of business is because they are too stubborn to change the way they do business when a legitimate competitor (see stores listed above) comes to town.

I think WalMart selling products below cost in order to drive other businesses out has something to do with it. It's happened with pharmacies in Arkansas. Luckily, pharmacists are resourceful enough to put a stop to that pretty quick.

But you believe what you want. Stay comfortable.


Indeed. The only real solution to such predatory marketing is purchasing collectives like TrueValue or BookSense, where indie retailers can pool their purchasing power in exchange for carrying the collective's brand. It's a small price to pay to stay in the game against the big box stores. But that isn't necessarily going to work for a more general sales model -- for one thing, if someone starts a competing collective, that dilutes the power of the original collective, ruining the competitive advantage against the big boys (I can't imagine Ace and TrueValue do more than keep their heads above water against Lowe's and Home Depot, being franchisers of a bygone age), not to mention that since the big companies usually have a Congresscritter or two in their back pockets, the indie collectives run the risk of getting Sherman sicced on them by the very people Sherman was supposed to protect them against. Try to build something like that among general retailers (say, this rather nice general store in Orleans, MA called Snow's and a local chain called Benny's), the logistics would likely be nightmarish.

The point of much business regulation is to keep the barriers to entry as low as reasonable for outsiders as well as to provide a liveable working environment for employees. By becoming as big as they have, retailers like Walmart have outstripped the enforcement ability of current law, and essentially kiboshed any attempt to update the laws. Under the circumstances, deregulation can only serve to calcify the current situation in favor of the bigger operators.
 
2007-12-05 10:19:29 PM  
jsteiner78: whidbey seems like a real knuckle dragger. Did you finish high school? You don't seem to have any basic knowledge about the world you live in, just some irrational fears about evil business people knocking you out of your comfort zone.

whidbey: Your comment is completely uncalled for.

Indeed. As someone who never finished high school, I take umbrage.
 
2007-12-05 10:35:04 PM  
MrsHashBrown: Below whose cost? Theirs or the other businesses in town?

WalMart pharmacies sell drugs below their own costs.

WalMart has deeper pockets than the average chain pharmacy, much less an independent shop. They thumb their nose at capitalism, sell at a loss, and wait until the other pharmacies leave.

If pharmacists in Arkansas do it better than Wal-Mart, good for them too. I don't think we're in disagreement.

The real issue is that pharmacists make their money from buying a product and selling it for more than they bought it- which is a goddam travesty for a healthcare professional. They should be paid for the service they provide, rather than being a glorified merchant. We need NPI numbers.

But don't get me started on all that.
 
2007-12-05 10:36:01 PM  
Mr. Coffee Nerves: It cost Pennsylvania taxpayers $30 million last year to cover the health insurance of Wal-Mart employees

Otherwise PA would be paying $150M to these people to fully cover them as they couldn't get another job? I'm not seeing what the problem is here.

WalMart's the modern day Woolworth's. Oh wait you haven't heard of that "monopoly" from the 1920's?

/ loves the Woolworth building in NYC
 
2007-12-05 10:40:44 PM  
hillbillypharmacist: The real issue is that pharmacists make their money from buying a product and selling it for more than they bought it- which is a goddam travesty for a healthcare professional.

Why should it be different for a "healthcare" professional versus a "computer services" professional or a "sammich making" professional?

They should be paid for the service they provide, rather than being a glorified merchant.

How much is that exactly?
 
2007-12-05 10:46:31 PM  
Rational Exuberance: ultimate_loser: DRTFA

just wait until Walmart gets their bank up and running...

/wish i was kidding.

A Wal-Mart bank would actually be a great thing. The financial industry has the worst kind of fees and interchange charges - competition from Wal-Mart would make this go down. There's a reason the rest of the industry doesn't want a Wal-Mart bank - it's because Wal-Mart actually makes operations more efficient.



Yeah, whatever. The only reason I don't shop at Walmart is because there's usually only 3 or 4 lines open. I can get all my shopping done at least a half hour sooner by going elsewhere.

Walmart is only cheaper if your time is free.
 
2007-12-05 10:55:57 PM  
lelio: Why should it be different for a "healthcare" professional versus a "computer services" professional or a "sammich making" professional?

It's not different, actually. It's more serious, though. Pharmacists have can spot and solve problems, manage drugs for specific disease states, give vaccinations, and basically be providers of free medical advice. However, these abilities are shadowed, especially at a place like WalMart, by the pressure to get as many drugs out the door as quickly as possible. The healthcare system as a whole would be cheaper if pharmacists could actually take the time to do these things. Studies have been done that show a definite and substantial money savings when pharmacists round with doctors in hospitals (which is what I do). I don't think it's any different for those of us handing out medication. Errors can be caught, good advice can be given, pitfalls can be avoided. Fewer people will die.

If the pharmacists are paid for this service, instead of selling drugs for a profit, a better balance can be struck. And small independent pharmacies will flourish.

It would cost about $10 for a new prescription and a far smaller fee for a refill. Billed to your insurance, of course.
 
2007-12-05 11:12:19 PM  
Target may have a better crowd than walmart during the day, but nothing beats being able to go to walmart after midnight, when you don't have to deal with anyone.
 
2007-12-05 11:13:27 PM  
If you don't like it .... don't shop there. Tell your friends not to shop there. And yes, corporate responsibility is possible.
img353.imageshack.us
 
2007-12-05 11:18:12 PM  
Efficiency should be for the sake of humanity, not for the sake of itself. Free market competition often comes with externalities that are not part of the model and may not even be quantifiable; yet they are real effects that should not be ignored.
 
2007-12-05 11:20:14 PM  
Haveing rules and regulation is one thing. Nickel and diming people for every minor change is another. A distinction needs to be made.
 
2007-12-05 11:21:35 PM  
Anybody else hungry for a nice, delicious $2.97 jar of Vlasic pickles?
 
2007-12-05 11:22:23 PM  
While I wouldn't say that the Wal-martification of america is CAUSED by this, it certainly is WORSENED by this.
 
2007-12-05 11:28:10 PM  
voidrunner: It's funny reading these responses, I live in Cuyahoga Falls, yup home of the major airport in Tommy Boy, and Jack Lemmon's presidental library. At anyrate, The over running of concrete in the city has ruined most of the homes. The problem is, when it rains, 3/4 of the cities houses flood. They blame it on what is knows as a "100 year storm" bull, it is too much concrete, I live near the top of a hill (10th street for those of you taking count) and every heavy rain our basement becomes a swimming pool.

That's weird, I live in Cuyahoga Falls too. Next to Brookledge Golf Course off Bailey.

Small world.
 
2007-12-05 11:31:58 PM  
Reason is honestly THE most persistently idiotic magazine around.

It wouldn't surprise me if the writers for REASON are the same people who write the columns for US Weekly.
 
2007-12-05 11:34:21 PM  
As a former resident of Alexandria (within two blocks walking distance to Old Town) I'll tell you why the "mom & pops" are losing out and the big chains are moving in. It has nothing to do with regulation and just about everything to do with the property values of the area. Most leases of restaurant and store space are done on percentage of sales basis. (Base rent + X% of sales)

What the chains do is go to the landlord and ask them about the terms of the current lease and when it expires. (If they have scouted a suitable location for there next store.) When they find out the terms of the leases, they show the landlord their financials and show their sales volume per store. In most cases, given their huge advertising and marketing budgets, their sales are going to be more than the local mom & pop operation. Now the landlord isn't going to pass up the revenue on the percentage of sales basis, so they boot the current tenant (at the expiration of the lease) and the big chain moves in.

I saw it happen too many times to business owners I knew in the area and almost everyone without exception told me the reason they were shuttering was they couldn't afford the terms of the new lease the landlord was demanding. I never heard one of them complain about over-regulation as being the reason why they were going out of business.
 
2007-12-05 11:36:21 PM  
whidbey: Regulation ONLY HAPPENS because companies don't play fair. THE ONLY reason.

What happens when the people making the regulations don't play fair? Then what?

Absolutist statements like yours are seldom right. You seem to be more driven by idealogical hatred than common sense.

While I do believe in regulation, there comes a point when said regulation does become too large of a burden. I mean, come on, a $55 "ladder fee"? Wtf is that?

This is the same mentality that drives those asinine homeowners association rules that end up in the news now and then. You get a bunch of retired people together with a lot of time on their hands, and instead of sticking their nose through their curtains to see what you're up to, they've then got the power to stick their nose into your private affairs and dictate your life to their hearts content.

Regulations can be good, regulations can be bad.

Now that's a 100% correct statement on this issue :-)
 
2007-12-05 11:51:01 PM  
THe only reason Wal-Mart is evil is that I can never find a decent parking spot at one of them.
 
2007-12-05 11:51:56 PM  
The first two responses in the thread are BRILLIANT refutations of the article--what else do we need with logic as sharp as theirs? Minds like that could be finding new ways to fold sweaters at those Gaps stores....
 
2007-12-05 11:52:40 PM  
whidbey: And without said regulation, small business doesn't stand a chance.

RTFA much?
 
2007-12-05 11:54:11 PM  
Bill Frist: Reason is honestly THE most persistently idiotic magazine around.

It wouldn't surprise me if the writers for REASON are the same people who write the columns for US Weekly.


Oh, come off it. Reason is a sadly uneven and amateurish rag with way too much "ideologically pure" crap in it. But "most idiotic magazine"? Shiat, man, it doesn't even make the top ten.
 
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